[Article] Hundreds of jobs to go at hapless CIE

[Mark Hennessy]

Tribune front page today reports massive cuts in services from CIE for 2009.

What this means for IE is that no additional services will run.

BE and DB to cut back frequencies.

Full text to follow this evening when the Tribune is online.

[Mark Gleeson]

This has been floating around in the background for several months

On the Irish Rail side numbers ranging from 150 to 600 have been mentioned

[Mark Hennessy]

The article mentions no new services specifically for WRC and the Midelton line.

Does that mean they will be built, then mothballed or just abandoned in their current state?

[Mark Gleeson]

Drivers and trains have already been provisioned for Midleton and the WRC.

If it comes to it IE management will take Midleton any day over the WRC, the CEO has clearly stated the WRC is a case of the government willing to pay to cover the significant loses

[Mark Gleeson]

Hundreds of jobs to go as stricken CIÉ cuts services
Shane Coleman, Political Editor
Emergency proposals to save company as financial meltdown is looming
Hundreds of redundancies, the withdrawal of some CIÉ services, garage closures and a pay freeze are all being seriously considered as the company faces an unprecedented threat to its financial viability.

Dramatic cost savings are being proposed by the group which two months ago sought a 20% fare rise from the government, the Sunday Tribune can reveal.

CIÉ, made up of Iarnrod Eireann, Dublin Bus and Bus Eireann, is projecting a loss of €131m for next year, compared to an operating deficit of just €1.5m in 2007.

Bus passenger numbers are down by 4% so far this year, while rail passengers are down by 1%. And costs are projected to rise by €73m, or 10%, across the group next year.

The projected 2009 operating deficit will be reduced by around €45m from a 10% fare increase and a €5m increase in the state subvention – both of which the government intends to grant. However, this still leaves a sizeable deficit.

And the Sunday Tribune has learned that CIÉ has extensively briefed the government on potential savings of around €45m at the three companies. Measures being considered include:

? The withdrawal from service of around 100 buses at Dublin Bus through reduced frequency on some routes and withdrawal of services on a small number of lightly-used routes.

? The release of as many as 400 staff at Bus Eireann with over 170 buses being withdrawn from service.

? The cancellation of over 40 Bus Eireann services and a reduction of services on a further 150 routes.

The government has been warned by the group that the proposed service reductions on Bus Eireann are extensive and will have a significant impact across the country.

For Iarnrod Eireann, the emphasis is on deferring proposed new services instead of cutting services. It has been proposed that the increase in service frequencies on routes from Dublin to Limerick, Galway, Waterford and Wexford will be deferred. And there may be a reduction in capacity on off-peak Dart and other routes. Other proposals include the deferral of a limited number of new services on the Western Rail Corridor, the Kildare line and on Cork-Midleton.

The government has also been told that, in addition to the reductions outlined, the companies may have to consider a pay freeze and redundancies. A cost and efficiency review of Dublin Bus and Bus Eireann is being carried out by consultants Deloitte.

A spokesman for CIÉ said the group was "facing a more difficult financial situation in 2009, in light of the changed economic environment, increased costs and reduced subvention". While he said that "all aspects of the cost base" were being examined for potential savings, the spokesman stressed "no decision has yet been made on the final measures to be taken".

http://www.tribune.ie/news/article/2...e-cuts-servic/

There is no reduction in subvention in 2009 its the same as last year plus the long standard 5%

[ThomasJ]

Originally Posted by Sunday Tribune

For Iarnrod Eireann, the emphasis is on deferring proposed new services instead of cutting services. It has been proposed that the increase in service frequencies on routes from Dublin to Limerick, Galway, Waterford and Wexford will be deferred. And there may be a reduction in capacity on off-peak Dart and other routes. Other proposals include the deferral of a limited number of new services on the Western Rail Corridor, the Kildare line and on Cork-Midleton.

Does this mean the Rosslare changes could be in doubt?

[Mark Gleeson]

The reason for the delay is to do with the delays in delivering the fleet, blaming the government is a another classic trick to take the heat off management

Curiously enough the late delivery should mean a penalty clause in the contract and thus cost savings

[PLUMB LOCO]

Hello - Sorry to be cheeky as a new kid on the block but does anybody apart from committee members contribute to these boards?

[Thomas Ralph]

I'm not on the committee and I like to think I contribute from time to time.

[Rashers]

I'm not on the committee or even a member, but I like to contribute.

[Mark Hennessy]

The Editorial in todays Sunday Business Post has a line explicitly asking why the WRC should go ahead in 2009 given that it is guaranteed to be a loss maker straight away.

[Mark Gleeson]

Exact words

All non-essential projects planned for 2009 must be immediately dropped. How on earth was an extra €3 million-plus allocated in the 2009 spending plans to promoting the Irish language outside the Gaeltacht? Why are we going ahead with the Western Rail Corridor when a consultancy study clearly showed it would lose money every year?

http://www.thepost.ie/post/pages/p/s...709-qqqx=1.asp

[Mark Hennessy]

Indo story on the same:

http://www.independent.ie/national-n...s-1550818.html

But the move to cut jobs and row back on services comes as the Government embarks on intensive lobbying to encourage people to use public transport to get to work. If services are cut, it could force people back into their cars, adding to traffic gridlock across Ireland.

Of course it is obvious that there is a need for more frequent peak time services to attract people out of their cars but we don't have the cash for that.

[ACustomer]

The piece in the Tribune makes little sense:
(i) it states that costs are expected to increase by 10% in 2009. If this refers to current costs have they factored in the news on oil prices, which must come as a massive relief? Or did they foul up on their fuel hedging strategy? Wage costs should not be increasing by anything like 10% over the next year. If it includes capital projects, then the year on year timing should have little real significance for day-to-day operations.
(ii) it alleges that 2009's expected loss is €131 million compared with €1.5m in 2007. Are these numbers comparable? Are they both inclusive of operating subsidy?

[Mark Gleeson]

It all sounds like a joke really

Irish Rail fuel costs 2007 = 33.8 million (7.8% of total)
Dublin Bus fuel costs 2007 = 19.3 million (6.7% of total)
Bus Eireann fuel costs 2007 = 15.8 million (4.9% of total)

Total fuel bill 2007 69 million

Assuming static passenger numbers, income next year will be around 8% higher than last year. Oil prices today are below 2007 prices so even allowing the 35% for the mineral tax thing, thats only another 24 million on the bill

Where 131 million is coming from nobody knows, if they hedged all fuel at 140 dollars you get close to that number but even Ryanair didn't make that mistake when they messed up the hedge last year

[plant43]

This may be a silly question but do Irish Rail employ staff outside of the civil service? My uncle, for example, works a desk job in Inchicore and is a CO. As far as I am aware, he can't be fired, only re-deployed within the civil service.

[Mark Hennessy]

It would be interesting to figure out the reasons behind the huge drop in passengers.

http://www.irishtimes.com/newspaper/...739033791.html

CIÉ faces 'serious deficit' of €100m next year


TIM O'BRIEN

CIÉ FACES "a very serious deficit" in excess of €100 million next year, Minister for Transport Noel Dempsey confirmed yesterday.

Mr Dempsey said CIÉ, which has seen a severe drop in passenger numbers in recent months would incur the deficit "unless action is taken now". He revealed a review of bus usage by Dublin Bus and Bus Éireann had been completed and was expected this week.

He also said he would be speaking "individually" to each of the three CIÉ companies about their financial arrangements over coming weeks.

The difficulty faced by the companies was that increasing fares may reduce further the numbers of passengers, he said. In any case proposed fare increases would amount to only a portion of the proposed deficit and the group was facing some "very difficult choices", Mr Dempsey said.

The review to which Mr Dempsey referred is in fact the third review commissioned by as many ministers in recent years. Former minister for transport the late Séamus Brennan initiated a review of bus services in the light of possible challenges to State aid going to support State companies which operate in an open market. His successor Martin Cullen then initiated a review of routes which was followed by Mr Dempsey's review of bus usage.

In the balance is the question of whether the Government should - particularly in the case of Dublin Bus - subsidise additional buses to increase the availability of public transport; or allow the private sector to provide the buses and enter into significant competition with the State bus companies.

A statement by CIÉ said: "The CIÉ Group - Iarnród Éireann, Dublin Bus and Bus Éireann - are, like all companies in the economy, facing a more difficult financial situation in 2009."

[plant43]

Originally Posted by Mark Hennessy

It would be interesting to figure out the reasons behind the huge drop in passengers.

http://www.irishtimes.com/newspaper/...739033791.html

1. Jobs lost means less commuters.
2. Car park charges.
3. Fare increases.
4. Improvements in road infrastructure.

[Mark Gleeson]

5. Crap service

[dowlingm]

Does CIE hedge fuel costs? If so, they could still be paying significantly above spot price for their diesel if the contracts were signed when oil was well north of $100/bbl - and in all fairness people were screaming only a few months ago that we'd never see double figure oil again and if transport companies weren't hedged you were courting disaster.